Pretoria: While the relationship between South Africa and China has mutually benefited both nations through increased trade and investment, Deputy President Paul Mashatile has acknowledged a persistent trade deficit that favors China.
According to Nam News Network, South Africa's trade imbalance with China is mostly attributable to the nature of their trading relationship. South Africa primarily exports raw materials and minerals while importing manufactured and capital goods from China. Mashatile noted that South Africa's trade deficit with China increased from under US$1 billion between 1988 and 2000 to US$9.71 billion by 2023.
Mashatile emphasized the need for a more coordinated and strategic approach to address challenges such as access to the Chinese market, which is hindered by tariffs, non-tariff barriers, distance, and competition from other countries. This necessitates expanding South Africa's export portfolio, encouraging value-added exports, and establishing a more balanced trade relationship.
The Deputy President believes the two nations need to expand partnerships in various sectors. He stated that strategic trade and investment partnerships with China can create balance and significantly contribute to South Africa’s economic growth, job creation, and overall development.
He acknowledged the role of Chinese investment in South Africa, which includes businesses in key sectors such as banking, manufacturing, and renewable energy. South Africa's mineral exports, agricultural products, and manufactured goods have made significant inroads into the Chinese market. Since President Cyril Ramaphosa's investment mobilization drive, there has been a steady influx of investment from Chinese companies.
Mashatile highlighted a significant investment by the Industrial and Commercial Bank of China (ICBC), which purchased a 20% stake in the assets and earnings of Standard Bank for US$5.5 billion. Additionally, Chinese electronics manufacturer Hisense entered the South African market in 1997 and established an industrial park in 2013. Other Chinese flagship companies such as Zhong Xing Communications (ZTE) and Huawei Technologies are also expanding their presence in South Africa.
Over the last decade, 48 Chinese companies have invested in South Africa with a capital investment exceeding US$11.69 billion. As South Africa-China relations continue to deepen, new opportunities emerge for Chinese businesses seeking to enter the South African market, especially in sectors like renewable energy, green hydrogen, energy storage, infrastructure and logistics, special economic zones, pharmaceuticals and medical devices, beneficiation of critical minerals, and the digital economy.
Mashatile addressed delegates, expressing South Africa's desire to build on the economic relations that have seen substantial growth since the establishment of diplomatic ties in 1998. The longstanding relationship is valued because it is based on a shared vision for a prosperous future.
Both nations are actively involved in several multilateral institutions, including the United Nations (UN), the Group of 20 (G20), and BRICS, an intergovernmental organization composed of ten countries. South Africa and China utilize these platforms to collaborate on global issues and advocate for the interests of developing countries.
